Correlation Between ARK Next and Direxion Work
Can any of the company-specific risk be diversified away by investing in both ARK Next and Direxion Work at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ARK Next and Direxion Work into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARK Next Generation and Direxion Work From, you can compare the effects of market volatilities on ARK Next and Direxion Work and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ARK Next with a short position of Direxion Work. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Next and Direxion Work.
Diversification Opportunities for ARK Next and Direxion Work
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ARK and Direxion is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding ARK Next Generation and Direxion Work From in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Work From and ARK Next is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ARK Next Generation are associated (or correlated) with Direxion Work. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Work From has no effect on the direction of ARK Next i.e., ARK Next and Direxion Work go up and down completely randomly.
Pair Corralation between ARK Next and Direxion Work
Given the investment horizon of 90 days ARK Next Generation is expected to generate 2.22 times more return on investment than Direxion Work. However, ARK Next is 2.22 times more volatile than Direxion Work From. It trades about 0.1 of its potential returns per unit of risk. Direxion Work From is currently generating about 0.11 per unit of risk. If you would invest 11,118 in ARK Next Generation on October 20, 2024 and sell it today you would earn a total of 440.00 from holding ARK Next Generation or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARK Next Generation vs. Direxion Work From
Performance |
| Timeline |
| ARK Next Generation |
| Direxion Work From |
ARK Next and Direxion Work Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARK Next and Direxion Work
The main advantage of trading using opposite ARK Next and Direxion Work positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Next position performs unexpectedly, Direxion Work can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Direxion Work will offset losses from the drop in Direxion Work's long position.| ARK Next vs. ARK Autonomous Technology | ARK Next vs. ARK Genomic Revolution | ARK Next vs. ARK Fintech Innovation | ARK Next vs. ARK Innovation ETF |
| Direxion Work vs. ProShares Online Retail | Direxion Work vs. WisdomTree Cloud Computing | Direxion Work vs. Global X Cloud | Direxion Work vs. Global X Telemedicine |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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